Multi-note method and system for loans based upon lease revenue stream

ABSTRACT

A method, system and program product for creating a loan from a revenue stream from a lessee, the method comprising the steps of: determining a revenue stream from a lease of a leased tangible asset; calculating a Breakeven TA Note Rate, and a TA Note Amount for a TA Note based on a Multi-Note Loan Coupon, a TA Note Debt Service and market determined underwriting parameters for the tangible asset; calculating an CL Note Debt Service after the TA Note debt service, and other appropriate amounts, if necessary are subtracted from the revenue; calculating a Breakeven CL Note Rate and a CL Note Amount for a CL Note based on the calculated CL Note Debt Service, the Multi-Note Loan Coupon, a CL Note Debt Service, and market determined underwriting parameters; creating a file structure of one or more files for the TA Note and the CL Note; and associating the TA Note and CL Note to assign priorities for purposes of determining and distributing recoveries to holders of the TA Note and/or the CL Note and/or their designees in the event of a Multi-Note Loan default and allocating the rights and responsibilities of the holders of such notes. In a preferred embodiment, the Multi-Note Loan Coupon is initially an estimated value.

BACKGROUND OF THE INVENTION

1. Field of the Invention

The present invention relates generally to the fields of lending andleases, and more particularly to the creation of a loan based on aplurality of notes from a lease revenue stream.

2. Background

Single tenant properties that are net leased to credit tenants are animportant subset of the overall commercial real estate market. For avariety of strategic, competitive and accounting reasons, manycorporations choose to lease properties rather than own the underlyingreal estate. These types of properties are generally owned by developerswho have built the properties, or individuals or corporate owners whopurchase them after construction is complete.

Owners of single tenant properties net leased to investment gradecompanies have historically been financed by banks and insurancecompanies. This type of loan is based on the creditworthiness of theunderlying lessees/tenants and thus relies little on the liquidationvalue of the property.

Moving down the credit quality curve, the available options forborrowers become fewer and fewer. Prior to the establishment of thepublic capital market based credit tenant lease (“CTL”) lending businesscreated by Capital Lease Funding L.P., (“CLF”) in 1995, owners ofproperties net leased to marginal investment grade (as well assub-investment grade) tenants have traditionally been financed bytraditional real estate lenders which base their loans more upon theconventional real estate values of the properties rather than on theunderlying credit strength of the credit tenants, resulting in loweramounts of leverage.

The underwriting analysis for a conventional real estate loan reliesheavily on the liquidation value of the real estate securing the loan,the ability of the borrower to adequately address property operationsand the borrower's ability to adequately address re-leasing andre-tenanting of the property due to tenant rollover, among other things.Due to these uncertainties and fluctuations in operating income of theunderlying property, the loan proceeds from a conventional real estateloan are generally lower than the appraised value of the property(typically no more than 80%) and the debt service coverage ratio istypically no less than 1.20.

The CTL lending business created by CLF in 1995, was instrumental inestablishing a viable credit tenant lending program for a variety oftypes of investment grade tenants and varying qualities of credit tenantleases for which CTL loans were not previously available. The ability ofCLF to underwrite and securitize high leverage CTL loans to owners ofsingle tenant properties for substantially all categories of investmentgrade tenants had provided owners and borrowers with an attractivealternative to traditional forms of funding for these properties,particularly for those leased to marginal investment grade credits.

CLF operates as a specialty lender originating CTL mortgage loans madeprimarily to all types of investment grade tenants under leases rangingfrom 10 to 25 years in length. Each credit tenant loan is secured by afirst mortgage on a commercial real property subject to a long term netlease to a credit tenant and by an assignment of the credit tenant leaseand all rents due under the lease. Under a credit tenant lease, theprincipal parameter underlying the transaction is the credit quality ofthe applicable tenant rather than the credit quality of the borrower orthe liquidation value of the property. The underwriting analysis for acredit tenant loan consists primarily of an analysis of the credit andbusiness profiles of the credit tenant and the credit tenant lease. Thetypical credit tenant loan made by CLF has a 20 year term and is fullyamortized by scheduled rent payments under the credit tenant lease. As aresult, CLF's credit tenant loans (which approach a ratio of scheduledrent payments to debt service of 1.0) tend to have debt service coverageratios lower than conventional mortgage loans, as well as higher loan tovalue ratios, approaching 95%.

Lease Types

Historically, CTL loans, which were characterized by high leverage withdebt service coverage ratios approaching 1.0, were made to propertyowners who have net leased their property to tenants having aninvestment grade debt rating from a nationally recognized statisticalrating agency (“Rating Agency”), but were only available when theapplicable lease was a “bond” type lease. In a bond type lease, thecredit tenant is responsible for every monetary obligation associatedwith managing, owning, developing and operating the leased premisesincluding, but not limited to, the costs associated with the utilities,taxes, insurance, maintenance, ordinary and capital repairs andreplacements and losses due to a casualty and/or a condemnation. Thecredit tenant has no ability to terminate or abate rent under a “bond”lease. Consequently, loans secured by “bond” leases are analyzed as ifthey were direct obligations of the applicable tenant.

Double and triple net leases are generally long term leases to tenantswho are responsible for paying most of the costs of owning, operating,and maintaining the leased property during the term of the lease, inaddition to the payment of a monthly net rent to the lessor for the useand occupancy of the premises. Under double and triple net leases, incontrast to “bond” leases, a tenant has the right to terminate theapplicable lease or abate rent thereunder upon the occurrence of asignificant casualty or condemnation. Under a double net lease, thetenant may terminate the lease or abate rent thereunder, upon thefailure by the lessor to maintain or repair the property, provideadequate parking, maintain common areas or comply with other affirmativecovenants of the lease, or if the lessor leases property to a competitorof the credit tenant within a specified radius of the property orotherwise violates other negative covenants in the lease.

The financing of double net and triple net leases to investment gradetenants as CTL loans was pioneered by CLF in 1995. Previously, doublenet and triple net leases had been traditionally financed asconventional real estate loans. CLF's specialized lease enhancementmechanisms substantially mitigate the risk of potential interruption inthe rental stream so that such double and triple net leases can beevaluated as if they were “bond” leases. CLF's lease enhancementmechanisms comprise primarily an integrated set of specialized insurancepolicies, servicer advancing mechanisms, and various borrower reservefunds. These mechanisms support the lessor's maintenance and otherobligations under a credit lease in order to mitigate the risk of rentabatement or lease termination by the credit tenant due to the failureof a lessor to perform its obligations.

Commercial Mortgage Backed Securities Market

The commercial mortgage backed securities (“CMBS”) market wasestablished initially as a vehicle to liquidate the commercial mortgageloans held by the RTC resulting from the S&L financial crisis. The CMBSmarket has now grown into an approximately $80 billion annual market,with strong liquidity, strong research and a wide following by manyinstitutions. With the maturity of the CMBS market, CMBS pools have nowbecome homogenous in terms of the collateral type and underlyingcommercial mortgage loan terms. The current CMBS securities market isstructured such that the majority of the securities created from theunderlying mortgage loans have 10 year final maturities, whereas thesecurities created from CLF's long term CTL loans have final maturitiesranging from 15 to 25 years.

The CMBS 10-year “AAA” security has also become a very liquid“benchmark” security and investors will generally pay a premium for thisliquidity while, on the other hand, they will “punish” other types of“off the run” (i.e. non-conforming) CMBS securities, which are notperceived as being as liquid. Thus, as the CMBS market has matured, ithas become more difficult to sell “off-the-run” CTL securities, whichoften have final maturities beyond 10 years, in the public CMBS capitalmarkets. In addition, from time to time as prevailing economicconditions worsen and saturation in the marketplace of certain creditsdevelops, there may be limited demand and diminished liquidity for CTLsecurities backed by many types of investment grade tenants in both theCMBS market and the private whole loan market at any given time.

Thus, a current problem is the need for more liquidity in the public andprivate capital markets for securities created from high leverage CTLreal estate loans based upon lease revenue streams from long-term credittenant leases.

SUMMARY OF THE INVENTION

Briefly, one embodiment of the present invention comprises a method ofcreating a loan from a revenue stream from a lessee, comprising thesteps of: determining a revenue stream from a lease of a leased tangibleasset; calculating a Breakeven TA Note Rate, and a TA Note Amount for aTA Note based on a Multi-Note Loan Coupon, a TA Note Debt Service andmarket determined underwriting parameters for the tangible asset;calculating an CL Note Debt Service after the TA Note debt service, andother appropriate amounts, if necessary are subtracted from the revenue;calculating a Breakeven CL Note Rate and a CL Note Amount for a CL Notebased on the calculated CL Note Debt Service, the Multi-Note LoanCoupon, a CL Note Debt Service, and market determined underwritingparameters; creating a file structure of one or more files for the TANote and the CL Note; and associating the TA Note and CL Note to assignpriorities for purposes of determining and distributing recoveries toholders of the TA Note and/or the CL Note and/or their designees in theevent of a Multi-Note Loan default and allocating the rights andresponsibilities of the holders of such notes.

In a further aspect of the present invention, the Multi-Note Loan Couponis initially an estimated value, wherein the Breakeven TA Note Rate andthe CL Note Debt Service and the Breakeven CL Note Rate are calculatedor determined using the estimated Multi-Note Loan Coupon, and furthercomprising calculating the Multi-Note Loan Coupon based on the BreakevenTA Note Rate and the Breakeven CL Note Rate.

In a further aspect of the present invention, the step is provided ofrecalculating the Breakeven TA Note Rate, the Breakeven CL Note Rate andthe Multi-Note Loan Coupon based on the original calculated Multi-NoteLoan Coupon.

In a further aspect of the present invention, the step is provided ofperforming the recalculating step for the Breakeven TA Note Rate, theBreakeven CL Note Rate and the Multi-Note Loan Coupon multiple timesuntil a criteria is met.

In a further aspect of the present invention, the criteria is that amargin from the Multi-Note Loan Coupon equals or exceeds andpredetermined amount.

In a further aspect of the present invention, the CL Note Rate isdetermined in part from a corporate credit rate spread applicable to thelessee or its industry.

In a further aspect of the present invention, the step is provided ofcalculating a Breakeven Multi-Note Loan Rate using the Breakeven TA NoteRate and the Breakeven CL Note Rate as elements in an algorithm.

In a further aspect of the present invention, the associating stepcomprises assigning priority of distribution of tangible asset recoveryproceeds first to the TA Note, and any excess to the CL Note andassigning priority of the distribution of the proceeds of a DefaultedLease claim first to the CL Note and any excess to the TA Note.

In a further aspect of the present invention, the determining anddistributing step comprises on the occurrence of a sale of the tangibleasset after a default under the Multi-Note Loan, calculating an excessof sale proceeds over amounts due for a payoff of the TA Note and, onreceipt of the proceeds from the Defaulted Lease claim, calculating anexcess of proceeds from the Defaulted Lease claim over amounts due for apayoff of the CL Note; and electronically associating the excess of saleproceeds over the amounts due under the TA Note with the file for the CLNote and/or electronically associating the excess of proceeds from theDefaulted Lease claim over amounts due under the CL Note with the filefor the TA Note.

In a further aspect of the present invention, the step is provided oftransferring the calculated excess amount from the sale proceeds of thetangible assets to a holder of the CL Note or its designee.

In a further aspect of the present invention, the step is provided oftransferring the calculated excess amount from the Defaulted Lease claimto a holder of the TA Note or its designee.

In a further aspect of the present invention, the step is provided ofelectronically associating the one or more files for the TA Note and theCL Note, wherein the one or more files comprise electronic files.

In a further aspect of the present invention, the step is provided oftransferring the TA Note and CL Note to different parties.

In a further aspect of the present invention, the step is provided ofsubtracting from the lease revenues loan reserve amounts to supportlessor maintenance and other obligations to mitigate risk of potentialtermination of or interruption in the lease payments due to the failureof the lessor or others to perform their obligations.

In a further aspect of the present invention, the step is provided ofsubtracting from the Multi-Note Loan proceeds amounts to pay premiumsfor specialized insurance policies to mitigate the risk of potentialtermination of or interruption in the lease payments due to variouspotential contingencies.

In a further aspect of the present invention, the step is provided ofobtaining a Breakeven TA Note Rate comprises obtaining a benchmark rateand a Breakeven TA Note Spread.

In a further aspect of the present invention, the step of obtaining theBreakeven CL Note Rate comprises determining a discount rate based on analgorithm that uses a benchmark rate and a lessee corporate bond spreadas elements.

In a further aspect of the present invention, the step is provided ofobtaining the Breakeven CL Note Rate comprises determining a discountrate based on an algorithm that uses a benchmark rate and a genericcorporate bond spread based on a debt rating.

In a further embodiment of the present invention, a method is providedof creating a loan from a revenue stream from a lessee, comprising thesteps of: determining a revenue stream from a lease of a leased tangibleasset; calculating and determining parameters of a TA Note and a CL Notebased in part on the revenue stream; creating a file structure of one ormore files for the TA Note and the CL Note; and associating the TA Noteand CL Note to assign priorities for purposes of determining anddistributing recoveries to holders of the TA Note and/or the CL Noteand/or their designees in the event of a Multi-Note Loan default.

In a further aspect of the present invention, the associating stepfurther comprises allocating rights and responsibilities of the holdersof such notes and associating those rights and responsibilities with theTA Note and CL Note file structure.

In a further aspect of the present invention, the step of calculating anCL Note Debt Service after a TA Note debt service is subtracted from therevenue stream; and wherein at least one parameter for the CL Note isdetermined based on the CL Note Debt Service.

In a further aspect of the present invention, the calculating anddetermining parameters of a TA Note and a CL Note step is also based inpart on a Multi-Note Loan Coupon.

In a further aspect of the present invention, the Multi-Note Loan Couponis initially an estimated value, and wherein the TA Note parameters andCL Note parameters are calculated or determined using the estimatedMulti-Note Loan Coupon; and further comprising recalculating theMulti-Note Loan Coupon based on the resulting TA Note parameters and theCL Note parameters.

In a further aspect of the present invention, the step is provided ofrecalculating at least one parameter for the TA Note and the CL Note andrecalculating the Multi-Note Loan Coupon based on the calculatedMulti-Note Loan Coupon.

In a further aspect of the present invention, the step of calculatingand determining parameters for the CL Note comprises determining adiscount rate based on an algorithm that uses a benchmark rate and alessee corporate bond spread as elements and then determining aBreakeven CL Note Rate.

In a further aspect of the present invention, the step of calculatingand determining parameters for the CL Note comprises determining adiscount rate based on an algorithm that uses a benchmark rate and ageneric corporate bond spread based on a debt rating and thendetermining a Breakeven CL Note Rate.

In a further aspect of the present invention, the step is provided ofaggregating a plurality of the TA Notes or the CL Notes to obtain a poolvalue.

In a further aspect of the present invention, the pool value is sentelectronically to a potential buyer.

In a further aspect of the present invention, the steps are provided ofproviding a web page with web content that performs the calculating anddetermining step.

In a further aspect of the present invention, the step is provided ofcalculating a Multi-Note Loan Coupon using the web content; anddisplaying the Multi-Note Loan Coupon to a potential borrower.

In a further aspect of the present invention, a web page is providedthat includes web content that displays TA Notes and CL Notes and thatfacilitates a potential buyer forming a customized pool of TA Notes orCL Notes.

In a further aspect of the present invention, steps are provided ofproviding a web page with web content that performs the calculating anddetermining step, the calculating of the Multi-Note Loan Coupon, and therecalculating of at least one parameter for the TA Note and the CL Noteand recalculating the Multi-Note Loan Coupon step.

In a further embodiment of the present invention, a computer-implementedmethod is provided of creating a loan from a revenue stream from alessee, comprising the following steps: determining rents from a leaseof an asset; obtaining an indication of a value of the asset; obtaininga TA Note to tangible asset value ratio; obtaining an estimatedMulti-Note Loan Coupon; calculating a Breakeven TA Note Rate;calculating a Breakeven TA Note Value for a TA Note using an algorithmthat includes as factors the indication of value of the tangible asset,the Breakeven TA Note Rate, and the TA Note to tangible asset valueratio and appropriate debt service coverage ratio for the asset;calculating a CL Note Debt Service; obtaining a Breakeven CL Note Ratebased in part on the market determined corporate bond spread for thelessee or its industry; calculating a Breakeven CL Note Value based onpredetermined elements including the CL Note Debt Service, the BreakevenCL Note Rate and a term for the CL Note; calculating a BreakevenMulti-Note Loan Rate using the Breakeven TA Note Rate, the Breakeven CLNote Rate, TA Note Debt Service and the CL Note Debt Service as elementsin the calculation; and calculating a Multi-Note Loan Coupon by adding alender profit margin to the Breakeven Multi-Note Loan Rate.

In a further aspect of the present invention, a computer-implementedsystem of creating a loan from a revenue stream from a lessee isprovided, comprising a processor programmed to perform the followingmethod steps: determining a revenue stream from a lease of a leasedtangible asset; calculating a Breakeven TA Note Rate, and a TA NoteAmount for a TA Note based on a Multi-Note Loan Coupon, a TA Note DebtService and market determined underwriting parameters for the tangibleasset; calculating an CL Note Debt Service after the TA Note debtservice, and other appropriate amounts, if necessary are subtracted fromthe revenue; calculating a Breakeven CL Note Rate and a CL Note Amountfor a CL Note based on the calculated CL Note Debt Service, theMulti-Note Loan Coupon, a CL Note Debt Service, and market determinedunderwriting parameters; creating a file structure of one or more filesfor the TA Note and the CL Note; and associating the TA Note and CL Noteto assign priorities for purposes of determining and distributingrecoveries to holders of the TA Note and/or the CL Note and/or theirdesignees in the event of a Multi-Note Loan default and allocating therights and responsibilities of the holders of such notes.

In a further embodiment of the present invention, a program product isprovided for creating a loan from a revenue stream from a lessee,comprising machine-readable program code for causing a machine toperform the following steps of: determining a revenue stream from alease of a leased tangible asset; calculating a Breakeven TA Note Rate,and a TA Note Amount for a TA Note based on a Multi-Note Loan Coupon, aTA Note Debt Service and market determined underwriting parameters forthe tangible asset; calculating an CL Note Debt Service after the TANote debt service, and other appropriate amounts, if necessary aresubtracted from the revenue; calculating a Breakeven CL Note Rate and aCL Note Amount for a CL Note based on the calculated CL Note DebtService, the Multi-Note Loan Coupon, a CL Note Debt Service, and marketdetermined underwriting parameters; creating a file structure of one ormore files for the TA Note and the CL Note; and associating the TA Noteand CL Note to assign priorities for purposes of determining anddistributing recoveries to holders of the TA Note and/or the CL Noteand/or their designees in the event of a Multi-Note Loan default andallocating the rights and responsibilities of the holders of such notes.

In a further embodiment of the present invention, a program product isprovided for creating a loan from a revenue stream from a lessee,comprising machine-readable program code for causing a machine toperform the following method steps: determining a revenue stream from alease of a leased tangible asset; calculating and determining parametersof a TA Note and a CL Note based in part on the revenue stream; creatinga file structure of one or more files for the TA Note and the CL Note;and associating the TA Note and CL Note to assign priorities forpurposes of determining and distributing recoveries to holders of the TANote and/or the CL Note and/or their designees in the event of aMulti-Note Loan default.

In a further embodiment of the present invention, a program product isprovided for creating a loan from a revenue stream from a lessee,comprising machine-readable program code for causing a machine toperform the following method steps: determining rents from a lease of anasset; obtaining an indication of a value of the asset; obtaining a TANote to tangible asset value ratio; obtaining an estimated Multi-NoteLoan Coupon; calculating a Breakeven TA Note Rate; calculating aBreakeven TA Note Value for a TA Note using an algorithm that includesas factors the indication of value of the tangible asset, the BreakevenTA Note Rate, and the TA Note to tangible asset value ratio andappropriate debt service coverage ratio for the asset; calculating a CLNote Debt Service; obtaining a Breakeven CL Note Rate based in part onthe market determined corporate bond spread for the lessee or itsindustry; calculating a Breakeven CL Note Value based on predeterminedelements including the CL Note Debt Service, the Breakeven CL Note Rateand a term for the CL Note; calculating a Breakeven Multi-Note Loan Rateusing the Breakeven TA Note Rate, the Breakeven CL Note Rate, TA NoteDebt Service and the CL Note Debt Service as elements in thecalculation; and calculating a Multi-Note Loan Coupon by adding a lenderprofit margin to the Breakeven Multi-Note Loan Rate.

BRIEF DESCRIPTION OF THE DRAWINGS

FIG. 1 is a schematic block diagram of a conceptualized operation of thepresent invention.

FIG. 2 is a schematic block diagram of a preferred embodiment of thepresent invention.

FIG. 3 is a block diagram of a computer system that may be utilized toimplement the present invention.

FIG. 4 is a flowchart of a preferred embodiment of the method of thepresent invention.

FIG. 5 is a diagram of a screen shot display of a user interface for acomputer program consistent with the teachings of the present invention.

FIG. 6 is a diagram of a screen shot display of a user interface for acomputer program consistent with the teachings of the present inventionfor a 15 year lease.

DETAILED DESCRIPTION OF THE PREFERRED EMBODIMENTS

The present invention provides a method, program product and system thatprovides a loan structure that meets one or more of the following goals:

-   1. Creates securities which can be sold into deep and liquid    markets;-   2. Improves the certainty of execution in either the public or    private capital markets;-   3. Captures more efficiently the inherent value of loans which are    backed by both highly rated credits and high quality real estate.-   4. Offers substantially the same level of proceeds to a borrower as    a 20 year fully amortizing CTL loan-   5. For lease terms less than 20 years, offers significantly more    proceeds to a borrower than a fully amortizing CTL loan of the same    or similar term as the lease.

In a preferred embodiment, the present invention creates a loan with anew multi-note structure with a shorter term final maturity thantraditional CTL loans, such as, for example, 10 years, and the followingcharacteristics:

-   1. A Tangible Asset Note (“TA Note”) supported by lease payments    which may have typical fundamentals for that particular asset type    (e.g., for real estate, for example, no more than 75%-80% loan to    value ratio with an approximate 1.20 debt service coverage ratio or    greater, a loan term for example of 10 years (“TA Note Maturity    Term”), an amortization term for example of 25 years and a balloon    payment at the end of the TA Note Maturity Term in the amount of the    outstanding loan balance at the end of the TA Note Maturity Term    which may be for example a loan to value ratio of approximately 60%)    which may be placed into generic public (or private) capital market    securitization transactions, such as generic real estate CMBS    securitizations.-   2. A credit lease backed note (“CL Note”) supported by rent payments    whose credit rating would be commensurate with the credit rating of    the underlying tenant of the credit lease. The CL Note is a    self-amortizing loan with a loan term no greater than the TA Note    Maturity Term (“CL Note Amortization Term”). This note is created by    monetizing the excess cash flow that would otherwise go to the    borrower after debt service payments on the TA Note. These CL Notes    may be issued, by way of example but not by way of limitation, into    a generic Collateralized Bond Obligation (“CBO”) securitization.-   3. A clearly defined legal and electronic file structure that    delineates asset recovery priority, asset disposition authority and    priority of lease stream payments while maintaining the credit    quality of each note and the associated cash flows. This legal and    associated electronic structure may be provided, in a preferred    embodiment, through an inter-creditor agreement. Such an agreement    is instrumental in assuring that the nationally recognized Rating    Agencies ascribe a credit rating to the CL Notes commensurate with    that of the credit rating of the underlying credit tenant.    The Loan Product/Structure Economics

Typically, a full term, fully leveraged 20 year CTL loan will be pricedat an interest rate spread premium to that of the underlying interestrate spread of the senior unsecured debt of the corporation. Forexample, Company X may have a debt rating of BBB+ (S&P) while the seniorunsecured bonds of the company may trade on the secondary market at aspread of 240 basis points over the average life U.S. treasury. Thespread at which the CTL loan would trade in the CTL whole loan marketwould be approximately 50 basis points greater than that figure, or 290basis points over the average life U.S. treasury. Consequently, theinterest rate spread that might be charged to the borrower would mostlikely range from 300 to 315 basis points including a lender profit of10 to 25 basis points. (The average life treasury for a 20 yearself-amortizing loan would be approximately 13 years). If the 10 yearon-the-run Treasury Note was yielding 5.20% and the 30 year on-the-runTreasury Bond was yielding 5.61% at the time the loan was made then the13 year average life treasury would equal approximately 5.26% (basedupon a 20 year straight line interpolation between 5.20% and 5.61%) and,based on a 300 basis point spread and the average life treasury, thecoupon would equal approximately 8.26%.

The spread premium for the CTL loan over the senior unsecured bonds ofthe company is due primarily to the following reasons:

-   1. Lack of liquidity for the CTL loan as compared to the senior    unsecured debt,-   2. Lack of bond covenants for CTL loans, and-   3. Constraints of the bankruptcy laws regarding leases.

Reference is made to the rents that are shown in FIG. 5 in the middlecolumn. The rents could be fixed, as shown in the figure, or varying.Typically, with a full term, fully leveraged 20 year CTL loan, theentire rental payment from the tenant (except for double net leaseswhere generally only 90-95% of the rental payments are monetized) wouldbe monetized into a 20 year fully leveraged loan of approximately $9.9million.

Using the example from above, utilizing a new Multi-Note Loan structure(the “Invention”), the loan proceeds are summarized in FIG. 5. Note thatFIG. 5 is a screen shot that has been broken up into three figures inorder to comply with the Office font requirements for drawings. By usingthe Multi-Note Loan structure, a loan that is comparable in terms oftotal loan proceeds to a traditional long term CTL loan can be obtainedat better pricing to the borrower, determined as follows:

-   1. A TA Note is sized, by way of example but not by way of    limitation, based upon a typical 75% LTV ratio with 1.25 DSCR at a    230 basis point loan spread (“Breakeven TA Note Spread”) to the 10    year on-the-run Treasury (a typical real estate loan spread) and a    typical 300 month amortization term (“TA Note Amortization Term”)    See FIG. 5 b under the Lender column.-   2. A second note, referred to as the CL Note, is created by    monetizing the excess cash flow (the “Excess Cash Flow”), defined as    the cash flow remaining after subtracting the cash flow needed to    service the TA Note, deducting for any reserves, and deducting for    any monthly cash to go directly to the borrower, and any other    appropriate necessary amounts. This CL Note is created by    discounting this Excess Cash Flow at a discount rate (“The Breakeven    CL Note Rate”) over the 120 month term of the CL Note. As this CL    Note is a pure credit note, its price or spread is based on a    premium to the interest rate spread (“Breakeven CL Note Spread”) on    the senior unsecured debt obligations of Company X. As this CL Note    is even less liquid and somewhat more complicated than a regular CTL    loan, the spread premium is approximately 100 basis points (rather    than 50 basis points) greater than the senior unsecured debt of    Company X. See FIG. 5 a, the Corporate Spread line item of 2.400%,    as compared to the Spread/Cost of Funds line item in the Credit    Lease column of 3.400%, i.e., a 100 basis point difference.

The quoted loan spread to the borrower (“Borrower Multi-Note LoanSpread”) under the Multi-Note Loan structure will be based upon, amongother things, the Breakeven TA Note Spread and the Breakeven CL NoteSpread. Assuming the same Treasury Curve as listed in FIG. 5 the cost offunds to CLF in the capital markets (“the Breakeven Multi-Note LoanSpread”) resulting from these placements would be 242 basis points. Thislower cost (compared to a typical 20 year CTL loan) can be passed on tothe borrower resulting (after addition of a lender profit of 28 basispoints) in a lower Borrower Multi-Note Loan Spread to the borrower ofonly 270 basis points which would generate a note coupon of 7.90%. Theresulting loan proceeds of approximately $9.79 million are comparable tothe loan proceeds under a 20 year CTL loan.

Referring now to FIG. 1, there is shown a schematic block diagram of thepresent invention at a high level of abstraction. Block 10 comprises arequest from a borrower or mortgage correspondent broker for financing.The inquiry may be by telephone call, by mail, in person, or may occurautomatically via the receipt of a lease electronically, or via theInternet.

In block 20, the lease (if not already obtained in block 10) and otherpertinent information about the borrower, the property, the lease andthe lessee are received from the borrower/correspondent. A determinationis made based on appropriate criteria whether CTL or other financing issuitable for this property. Such criteria may include a minimum creditrating for the tenant/lessee to support credit tenant financing, forexample BB+ or higher; the lease type and term, for example, a 15 yearor longer lease term and NN, NNN or bond type lease; and objectives ofthe borrower, for example, does the borrower desire full leverage.

In block 30, a loan proposal is developed based on factors, such as thetenant/lessee credit rating, lease term and lease type. For example,stronger credits (A+ or higher) allow greater leverage and tighter loanspreads; a longer lease allows for a longer amortization schedule andgreater proceeds, a NNN or bond type lease allows for a lower debtservice coverage ratio. A term sheet for the Multi-Note Loan is thenissued, the terms of which are based upon the combination of the TA Noteand the CL Note.

In block 40, if the borrower/correspondent finds the loan proposalacceptable, then a loan application is issued, the borrower signs theapplication and, preferably, provides a deposit. In block 50, duediligence requirements are communicated, the loan undergoes anunderwriting process and the borrower pays expenses related to the loanunderwriting.

In block 60, upon completion of underwriting, the loan is subject toreview by a credit committee. If the loan is approved, the loan is thenfunded and the borrower receives funds, net of the underwriting expensesand fees. In block 70, the TA Note and CL note(s) are sold individuallyor a plurality of the TA Notes are pooled and sold, and/or a pluralityof the CL Notes are pooled and sold. The pooling and sale operation maybe automated and/or performed using telecommunication with note buyers,including via the Internet.

The basic operation of the method, program product and system of thepresent invention is shown, again at a high level of abstraction, inFIG. 2. In FIG. 2, a revenue stream of $85,000 per month comprising rentfrom a tenant/lessee 200 is used to create at least two notes. Therevenue stream amount is paid into a lockbox 210 (an industry termindicating that the rent is to be paid directly to the designee of thenoteholder) and then divided based first on paying the debt service onthe TA Note that is based on an underwritten debt service coverageratio, the TA Note Amortization Term, an underwritten TA Note to valueratio and the value of the asset being leased. In the example, shown inFIG. 2, the monthly debt service portion is $57,390.27, and is used tosupport a TA Note 220 of $7,500,000. The monthly Excess Cash Flow amountof $27,609.73 in this example is used to support a CL Note 230 of$2,285,576.67. The borrower 240 receives a loan based on the combinednotes of $9,785,576.67 at a rate to be discussed below.

Referring now to FIG. 3, there is shown an embodiment for implementingthe processing system and method of the present invention. Theprocessing system may, in one example, be implemented as a computersystem 300 which includes all of the customary components of a computersystem including a CPU 310, a display 320, a keyboard and/or other I/Odevice 330, a network or communications interface 340, RAM or ROM orother memory 350, as well as storage devices 360, which for example maybe implemented by disk and CD-ROM drives or arrays for storing one ormore electronic data bases. For purposes of explication only, thestorage device 360 is shown, in one embodiment, with a file 370 for a TANote, and a file 380 for a CL Note. It should be understood that thecomputer system 300 could also take a variety of other forms, such as aPDA, communications devices, such as a WAP enabled device, thatcommunicates directly with processing software at one or more processingsystems or at an intermediate computer server that communicates with aprocessing system, or various other convenient forms.

The computer system 300 could be connected through the communicationinterface 340 and via a communications network to one or more otherprocessing systems. The processing software to be described below may becontained on computer 300 or in other remote processing systems usingthe communications network 390. In the preferred embodiment, thecommunication network might be the Internet. However, the communicationnetwork could also include a wide area network (WAN), internetwork, apublic tariff telephone network or a private Value Added Network (VAN).Alternatively, the communication network can be implemented using anycombination of these different kinds of communication networks. Itshould be appreciated that many other similar configurations are withinthe abilities of one skilled in the art and all of these configurationscould be used with the method of the present invention. Furthermore, itshould be recognized that the computer system and network disclosedherein can be programmed and configured in a variety of differentmanners, by one skilled in the art, to implement the method stepsdescribed further herein.

The storage and databases for the method may be implemented by a singledata base structure at an appropriate site, or by a distributed database structure that is distributed across an intra or an Internetnetwork.

It should also be noted that a single CPU based computer system is shownfor clarity in the figure. One skilled in the art would recognize thatthe processing system 300 is representative only and could beimplemented using a multi-processor computer system. Alternatively, adistributed computer system could be implemented in which thefunctionality of the processing system could be provided by severalcomputer systems that are connected over a computer network. It is alsopossible to distribute the functionality of the processing system over amultitude of sites which are suitably connected together usingconventional networking or inter-networking techniques.

Furthermore, it should be recognized that the computer system andnetwork disclosed herein can be programmed and configured in a varietyof different manners by one skilled in the art, to implement the methodsteps discussed further herein.

The files and file components discussed herein may be paper files, butin a preferred embodiment comprise data structures with electronic datawhich may be implemented by one or a plurality of files and subfileswith appropriate electronic associations. The files or subfiles may belocated in one computer or may be distributed in a plurality of localand/or remote computers across a network. The number of files and themanner of distribution among computers and across a network and themethod of association is a design feature that may be chosen by thesystem designer.

Referring now to FIG. 4, there is shown a schematic block diagram of apreferred embodiment of the present invention. It is contemplated thatat least one, and preferably a plurality of the method steps to bedisclosed herein be performed via the computer implementation of FIG. 3,but may be performed in a different order than as shown in the exemplaryfigure. In block 400 a revenue stream amount is obtained for a lease ofa tangible asset in order to facilitate a Multi-Note Loan to a borrower.In one embodiment, the tangible asset is real estate and the revenuestream is rent from the tenant/lessee to a borrower. A screen shot of agraphical user interface of a computer program designed to perform oneor more of these steps is shown in FIGS. 5A-5C, using an example of realestate being leased under a 20 year lease by a Company A for apredetermined retail store use. FIGS. 5A-5C comprises a single screenshot that has been broken up to comport with drawing requirements forthe application. (Note that the underwriting parameters will change fordifferent assets.) In the example, Company A has a Moody's Rating of A2,and an S&P Rating of BBB+, and a Lease Type of NNN. The revenue streamof rent is $85,000 per month (Monthly Lease Payment slot in FIG. 5A)over the entire 240 month lease term in the present example. As notedabove, the rent may be a fixed amount per time period, or may vary.

In block 401, in the event that the lease is not a bond lease, steps aretaken to underwrite the lease. This process comprises identifying lessormaintenance and other obligations and lessee offset and terminationrights and utilizing appropriate lease enhancement mechanisms tomitigate risk of potential termination of or interruption in the leasepayments due to the failure of the lessor to perform its obligations orfor other causes that might cause such an interruption. By way ofexample but not by way of limitation, such a lease enhancementmechanisms might comprise subtracting from the revenue stream andescrowing a reserve to assure adequate resources for the lessor toperform its maintenance obligations. Additionally, this block would alsoencompass subtracting amounts from the Multi-Note Loan proceeds for thepayment of the premiums for casualty and condemnation insurance andother appropriate insurance. The foregoing steps may be taken in orderto enhance a lease other than a bond lease to bond type status allowingsuch lease to support a traditional CTL financing and a financing underthe Multi-Note Loan structures of the present invention. Note that thisstep is optional and may not be necessary for some leases such as bondleases.

The next step, represented by block 402, comprises determining a TA Noteto tangible asset value ratio. This ratio is generally an input that ismarket-determined, based on factors such as the tangible asset type,location, demographic profile, credit rating of the lessee, the leaseterm, and other factors. In FIG. 5C, the note to asset ratio for realestate for purposes of this example, shown next to the heading MaximumLTV, is 75%.

The next step in the diagram, as represented by block 404, is to obtainan indication of the value of the tangible asset that is being leased.By way of example, this indication of value could be obtained by anappraisal of the tangible asset, or simply by estimating the value ofthe tangible asset or by some other convenient means. In the example ofFIG. 5, the indication of value, shown next to the heading AppraisedValue, is $10,000,000 in FIG. 5A.

The next step shown in the diagram, represented by block 406, is todetermine the TA Note Amortization Term. This amortization term isgenerally a given input that is market-determined, based on factors suchas the tangible asset type, location, demographic profile, credit ratingof the lessee, the lease term, lease type and other factors. In FIG. 5B,the TA Note Amortization Term for real estate for purposes of thisexample, shown next to the heading Term/Amortization in the columntitled Lender is 300 months

The next step shown in the diagram, represented by block 408, is toestimate the Multi-Note Loan Coupon, (i.e., the interest rate charged tothe borrower). An estimate, based on market parameters, of theMulti-Note Loan Coupon is made which incorporates a lender's profitmargin. In FIG. 5B, the Multi-Note Loan Coupon for real estate forpurposes of this example, shown next to the heading Coupon in the columntitled Tangible Asset is 7.90%.

Note that due to the multi-note structure, in a preferred embodiment thecalculations are performed by working backwards in structuring theMulti-Note Loan by starting with an estimate of the Multi-Note CreditLoan Coupon. Using such an example calculation, the various otherparameters for the multi-note loan are calculated. Finally, theMulti-Note Credit Loan coupon is calculated, rather than estimated. Thenthis calculated Multi-Note Credit Loan Coupon is reviewed to determineif a satisfactory margin is obtained with that coupon interest ratelevel and whether the other parameters in the calculation areacceptable. In a preferred embodiment, if the resulting margin oranother parameter is not acceptable, then this calculated Multi-NoteCredit Loan Coupon is plugged back in and the individual note parametersare recalculated in an iterative process using the calculated Multi-NoteCredit Loan Coupon figure.

By way of example but not by way of limitation, in a typical real estateloan, a lender sets the coupon on the loan marginally higher than thebreakeven rate on the loan to establish the lender's profit. Both thecoupon and the breakeven rate are applied to the same set of debtservice payments. In the Multi-Note Credit Loan, the BreakevenMulti-Note Credit Loan Rate is based on two distinct breakeven rates,the Breakeven TA Note Rate and the Breakeven CL Note Rate, two distinctamortization terms, the TA Note Amortization Term and the CL NoteAmortization Term, and two distinct sets of debt services payments, theTA Note Debt Service and the CL Note Debt Service. The Multi-Note LoanCoupon is initially estimated at a premium to the Breakeven Multi-NoteCredit Loan Rate to establish the lender's profit. However, as one ormore of the parameters upon which any of the calculations are basedchanges as the result of changes in market parameters, the TA Note DebtService and CL Note Debt Service, among other things, also change,resulting in changes to the Multi-Note Loan Coupon. This, in turn, maycause the Breakeven Multi-Note Loan Rate to change. This creates aniterative process for structuring the loan whereby adjustments to theMulti-Note Loan Coupon are made causing, in some instances, arecalculation of the Breakeven Multi-Note Loan Rate one or more times inorder to structure the Multi-Note Loan with the desired level ofprofitability.

The next step shown in the diagram, represented by block 410, is tocalculate the TA Note Face Amount based on the required TA Note totangible asset ratio and the value of the tangible asset. Using the TANote to asset ratio of 75% and an indication of value for the tangibleasset of $10,000,000, the TA Note Face Amount would be $7,500,000. ThisTA Note Face Amount is shown in the Face Amount Of Note row in theTangible Asset column of FIG. 5B.

The next step shown in the diagram, represented by block 412, is tocalculate the TA Note Debt Service (the monthly payment to service theloan, including interest and principal and the final balloon payment dueat the end of the TA Note Term). The calculation of the TA Note DebtService is determined based upon predetermined elements including: theestimate of the Multi-Note Loan Coupon, the TA Note Amortization Termand the TA Note Face Amount. The calculated TA Note Debt Service maythen be tested to verify that the required minimum debt service coverageratio is adequate such that the calculated TA Note Debt Service coverageratio is greater than a minimum required debt service coverage ratio,which is a market input based on factors such as the tangible assettype, location, demographic profile, credit rating of the lessee, thelease term, lease type and other factors. An algorithm that may be usedto calculate the TA Note Debt Service in a preferred embodiment is asfollows:${{TA}\quad{Note}\quad{Debt}\quad{Service}} = {{TA}\quad{Note}\quad{Face}\quad{Amount}*\left( \frac{i*\left( {1 + i} \right)^{n}}{\left( {1 + {i/12}} \right)^{n} - 1} \right)}$where  n = TA  Note  Amortization  Term    i = Multi-Note  Credit  Loan  Coupon(Note: This method is the preferred embodiment however there is avariety of other methods to calculate this TA Note Debt Service. By wayof example but not by way of limitation, such other methods might bebased on such factors as varying the calendar used for the paymentcalculations, and varying the payment period.)

The next step in the diagram, represented by block 414, comprisesdetermining a Breakeven TA Note Spread. This Breakeven TA Note Spread isa market-determined input based upon a number of different criteria,which will depend on the tangible asset involved, but typically mightinclude the tangible asset type, location, demographic profile, creditrating of the lessee, the lease term, lease type, amortization term,loan term, prevailing capital markets asset interest rate spreads andother factors. For example, for a real estate asset, the spread would bedetermined, in part, based on whether the real estate was for a retail,office, or other use and is generally a market determined input. In theexample, the market-determined input for the Breakeven TA Note Spread,shown in the Spread/Cost of Funds row in the Tangible Asset column, is2.30% in FIG. 5B.

The next step in the diagram, as represented by block 416, is to obtaina Breakeven TA Note Rate. The Breakeven TA Note Rate may be determinedbased on the Breakeven TA Note Spread determined in block 414 and abenchmark interest rate. The benchmark rate may be any standardbenchmark, such as a U.S. Treasury interest rate, for example, the 5year or 10 year on-the-run US Treasury interest rates, or the LIBOR ratefor 1 week, 1 month, or 2 month, etc. Referring to FIG. 5B, thebenchmark interest rate used in the present example is shown in the BaseTreasury Rate row in the Tangible Asset column as 5.20% (10 yearon-the-run US Treasury). The Breakeven TA Note Spread in FIG. 5B, listedin the Spread/Cost of Funds row in the Tangible Asset column, is 2.30%.Accordingly, the Breakeven TA Note Rate is 7.50%, shown in FIG. 5B inthe Discount Rate row in the Tangible Asset column.

The next step in the diagram, represented by block 418, comprisescalculating a Breakeven TA Note Value amount based on predeterminedelements, including the TA Note Debt Service, the Breakeven TA NoteRate, and the loan term for the TA Note. By way of example but not byway of limitation, this calculation could comprise determining thepresent value of the amount of the TA Note Debt Service at thecalculated Breakeven TA Note Rate. The calculated Breakeven TA NoteValue amount in the screen shot example is $7,695,437.10, and is shownin the Loan Value row in the Tangible Asset column of FIG. 5B. Analgorithm that may be used to calculate the Breakeven TA Note Value isas follows:${{Breakeven}\quad{TA}\quad{Note}\quad{Value}} = {\sum\limits_{x = 1}^{n}\quad\left( \frac{\begin{matrix}{{TA}\quad{Note}\quad{Debt}\quad{Service}_{x}} \\\left( {{including}\quad{balloon}\quad{amoun}\quad t} \right)\end{matrix}}{\left( {1 + {i/12}} \right)^{x}} \right)}$  where  n = TA  Note  loan  term   i = Breakeven  TA  Note  Rate(Note: This method is the preferred embodiment however there is avariety of other methods to calculate this Breakeven TA Note Value. Byway of example but not by way of limitation, such other methods might bebased on such factors as varying the calendar used for the paymentcalculations, and varying the payment period.)

The next step in the diagram, as indicated by block 420, comprisescalculating the Excess Cash Flow (also referred to as the CL Note DebtService), defined as the cash flow remaining after subtracting the TANote Debt Service (as calculated in Block 412), and deductions for anyreserves, any cash going directly to the borrower, and any otherappropriate amounts from the lease revenue stream. The following is adescription of a preferred methodology that may be used in determiningthe amounts available for debt service for both the TA Note and the CLNote in Multi-Note Loans secured by real estate:

-   -   If there are no monetary lessor obligations under the lease (a        “Bond/NNN Lease”), including, without limitation, for        maintenance, repair, environmental remediation or correction of        latent defects, then 100% of the rent is available to be applied        to debt service for all notes of the Multi-Note Loan.    -   If there are monetary lessor obligations under the lease (a “NN        Lease”), then the total rent is divided by 1.05 and the quotient        (the “Debt Service Quotient”) of such calculation is the amount        available to be applied to the debt service and any monthly        reserves on all notes of the Multi-Note Loan.    -   The difference obtained by subtracting the Debt Service Quotient        from the total rent is cash which is generally released to the        Borrower each month (the “Borrower Monthly Cash”) after payment        of debt service and reserves for all notes of the Multi-Note        Loan.    -   The amount available for debt service for the Multi-Note Loan        (the “Multi-Note Loan Debt Service”) is either (a) for a        Bond/NNN Lease, 100% of the rent, or (b) for a NN Lease, the        difference obtained by subtracting all monthly reserves from the        Debt Service Quotient.    -   The TA Note is created based upon appropriate underwriting        parameters for the particular asset securing the Multi-Note Loan        as more particularly described above and is to be serviced by a        portion of the Multi-Note Loan Debt Service (the “TA Note Debt        Service”).    -   The CL Note, which will be serviced by the difference obtained        by subtracting the TA Note Debt Service from the Multi-Note Loan        Debt Service (the “CL Note Debt Service”) is then created based        upon the methodology more particularly described.

The next step in the diagram, represented by block 422, is to calculatea Breakeven CL Note Spread and Breakeven CL Note Rate. By way of examplebut not by way of limitation, the Breakeven CL Note Spread may becalculated by adding a premium (in this example 100 basis points) to thelessee's corporate bond interest rate spread as determined in themarketplace. For example, in the screen shot of FIG. 5B, the corporatebond interest rate spread for the particular lessee Company A with anS&P corporate bond rating of BBB+ is shown in the Spread/Cost Of Fundsrow in the Credit Lease column as 3.40%, which is a 100 basis pointpremium over the actual corporate bond spread of Company A, which is 240basis points, as shown in the row labeled “Corporate Spread” in FIG. 5A.Referring again to FIG. 5B, the benchmark interest rate used in thepresent example is shown in the Base Treasury Rate row in the CreditLease column as 4.80%. In this example calculation as noted earlier, theBase Treasury Rate of 4.80% is obtained by performing a straight-lineinterpolation of the 5 year Treasury Curve (4.74%) and the 10 yearTreasury Curve (5.20%) based on an average life of the CL Note of 5.7years. Accordingly, the Breakeven CL Note Rate, which is the sum of theBreakeven CL Note Spread and the Base Treasury Rate, is 8.20% in thisexample.

Alternatively, the corporate bond spread to be added to the benchmarkrate in block 422 could be a generic corporate bond spread based on thedebt rating and/or other factors for the tenant/lessee or it could beanother convenient spread.

The next step in the diagram, represented by block 424, comprisescalculating the CL Note Face Amount based on predetermined elements,including the CL Note Debt Service, the Multi-Note Credit Loan Coupon,and the CL Note Amortization Term. By way of example but not by way oflimitation, this calculation could comprise determining the presentvalue of the amount of the CL Note Debt Service discounted at theMulti-Note Credit Loan Coupon over the CL Note Amortization Term. Thecalculated CL Note Face Amount in the screen shot example of FIG. 5B is$2,285,576.67, shown in the row in the Credit Lease column.

The next step in the diagram, represented by block 426, comprisescalculating a Breakeven CL Note Value amount based on predeterminedelements, including the CL Note Debt Service, the Breakeven CL NoteRate, and the CL Note Amortization Term. By way of example but not byway of limitation, this calculation could comprise determining thepresent value of the amount of the CL Note Debt Service discounted atthe calculated Breakeven CL Note Rate. The calculated Breakeven CL NoteValue amount in the screen shot example of FIG. 5B is $2,255,936.95,shown in a row in the Credit Lease column. An algorithm that may be usedin a preferred embodiment to calculate Breakeven CL Note Value is asfollows:${{Breakeven}\quad{CL}\quad{Note}\quad{Value}} = {\sum\limits_{x = 1}^{n}\left( \frac{{CL}\quad{Note}\quad{Debt}\quad{Service}_{x}}{\left( {1 + {i/12}} \right)^{x}} \right)}$where  n = CL  Note  Amortization  Term i = Breakeven  CL  Note  Rate(Note: This method is the preferred embodiment however there is avariety of other methods to calculate this Breakeven CL Note Value. Byway of example but not by way of limitation, such other methods might bebased on such factors as varying the calendar used for the paymentcalculations, and varying the payment period.)

The next step in the diagram, as represented by block 428, comprisescalculating a Breakeven Multi-Note Loan Rate. The Multi-Note Loan isbased on predetermined elements comprising the Breakeven TA Note Rate,the TA Note Debt Service, the Breakeven CL Note Rate and the CL NoteDebt Service. The Breakeven Multi-Note Loan Rate, in a preferredembodiment, is the approximate interest rate which, when applied to theMulti-Note Loan Debt Service, produces a present value equal to the sumof the present value of the TA Note Debt Service discounted at theBreakeven TA Note Rate over the TA Note Maturity Term and the presentvalue of the CL Note Debt Service discounted at the Breakeven CL NoteRate over the CL Note Amortization Term. In FIG. 5B, the present valueof the TA Note Debt Service is $7,695.437.10, i.e., the Breakeven TANote Value, when discounted at the Breakeven TA Note Rate of 7.50%. Thepresent value of the CL Note Debt Service payments is $2,255,936.95,i.e., the Breakeven CL Note Value, when discounted at the CL Noteinterest rate of 8.20%. The sum of the present values for the two notesis $9,951,374.06. A discount rate of approximately 7.620% is required toproduce a present value of $9,951,374.06 for the Multi-Note Loan DebtService. This resulting Breakeven Multi-Note Loan rate is shown in theLender column next to the Discount Rate row. A variety of other methodsare available to calculate the Breakeven Multi-Note Loan Rate. Suchother methods would use one or more of the predetermined elements of theBreakeven TA Note Rate, the TA Note Debt Service, the Breakeven CL NoteRate and the CL Note Debt Service as elements in the calculation.

The next step in the diagram, represented by block 430, comprisescalculating the Multi-Note Credit Loan Face Amount, which is the sum ofthe TA Note Face Amount and the CL Note Face Amount. The calculatedMulti-Note Credit Loan Face Amount in the screen shot example of FIG. 5Bis $9,785,576.67, shown in the Face Amount of Note row in the Lendercolumn.

The next step in the diagram is to add an estimated margin to the BreakEven Multi-Note Loan Rate to obtain a calculated Multi-Note Loan Couponintended to incorporate a desired level of lender profit. The calculatedMulti-Note Loan Coupon is then plugged back into block 408 and theparameters for the TA Note and the CL note are recalculated in aniterative process. This operation may be repeated multiple times, asnecessary to fine tune the Multi-Note Loan Coupon to generate thedesired level of lender profit. The foregoing operation is representedby block 432.

A further step could be implemented, represented by Block 432 in thediagram, to improve the efficiency of a CMBS securitization, a CBOsecuritization, a loan sale transaction, or for other reasons, wherebythe Multi-Note Loan Coupon is reset at an annual rate which is lowerthan the original Multi-Note Loan Coupon, and the Multi-Note Loan FaceAmount is recalculated based on such reduced Multi-Note Loan Coupon (a“Loan Gross-Up”,) without (a) reducing the loan proceeds received by theborrower or (b) increasing the combined debt service payments for the TANote and the CL Note. In one embodiment, the Multi-Note Loan Couponwould be reset at a lower annual interest rate (e.g. 25 basis pointslower, depending on market conditions) and the Multi-Note Loan FaceAmount would be recalculated in the same manner set forth above usingsuch lower annual interest rate, which could have the effect ofimproving the execution and marketability of the loan by among otherthings, artificially creating a discount to par note.

FIG. 6 is a screen shot of a GUI for a computer program in accordancewith the present invention, using an example of a 15 year lease to aproperty owner whose property is net leased to Company B. The sameheadings are used as with FIG. 5. Reference is made to the rents thatare shown in FIG. 6A in the middle column. The rents could be fixed, asshown in the figure, or varying. Typically, with a full term, fullyleveraged 15 year CTL loan, the entire rental payment from the tenant(except for double net leases where generally only 90-95% of the rentalpayments are monetized) would be monetized into a 15 year fullyleveraged loan of approximately $8.8 million.

Using the example from above, utilizing a Multi-Note Loan structure, theloan proceeds are summarized in FIG. 6. By using the Multi-Note Loanstructure, a loan amount of approximately $9.3 million is obtained,which exceeds the loan amount generated by a 15 year fully amortizingCTL loan of approximately $8.8 million.

The next step in the diagram, represented by block 434, comprisesselling the TA Note and/or the CL Note. This step could comprise poolinga plurality of the TA Notes, securitizing and selling the resultingsecurity, and/or pooling a plurality of the CL Notes, securitizing, andthen selling the resulting security. The pooling could be performedmanually, or automatically, and could be performed on the web usingappropriate web content downloaded from a web site, as noted below.

An additional step represented by block 436, is comprised of creating aninteractive web site with web content to accept input information from apotential borrower, calculate the Multi-Note Loan Face Amount based ondeterminations of a TA Note and a CL Note as described above and thendetermining the Multi-Note Loan Coupon. The screen shot of the interfaceshown in FIG. 5 could be used as the interface for the web site.Alternatively or in addition, the calculated Multi-Note Loan Face Amountand Multi-Note Loan Coupon could be transmitted to a predeterminedlocation using a predetermined medium, such as email, fax or telephone,for example.

A further step could be performed using web content, wherein TA Notesand CL Notes are displayed to a potential aggregator or buyer, who maythen aggregate various TA Notes into a pool and various CL Notes into apool.

Note that an important component in a preferred embodiment of thepresent invention comprises using an intercreditor agreement toassociate legally and in a preferred embodiment electronically, the TANote and the CL Note together for various purposes including: (i)determining/calculating and distributing the proceeds from a foreclosureon the leased tangible asset, e.g. typically real estate and (ii)allocating the rights and responsibilities of the holders of such notes.The association of the notes would comprise, in one embodiment, creatingone or more files for a TA Note and a CL Note, and on the occurrence ofa sale of the leased tangible asset, calculating an excess of saleproceeds over at least amounts due for the payoff of the TA Note. In apreferred embodiment, the amount of the TA note would be paid off andother required amounts thereunder settled, and then the excess of thesale proceeds would be associated electronically or otherwise with thefile for the CL Note. The further step of actually transferring thecalculated excess amount to a holder of the CL Note or to anotherappropriate party could then be performed in one embodiment. In apreferred embodiment, the one or more files would be electronic filesand the association would be by means of references, and the calculationand transfers would be performed electronically.

A further important aspect of the invention and the intercreditoragreement is to associate electronically or otherwise a claim for rentsunder the bankruptcy code after rejection of the tangible asset lease inbankruptcy or other claim for rents and/or other amounts due under thetangible asset lease after default thereunder, (collectively a“Defaulted Lease Claim”) with the CL Note. This embodiment might alsoinclude the step of electronically associating any proceeds from theDefaulted Lease claim with the file for the CL Note. In a preferredembodiment, the amount of the CL note would be paid off and otherrequired amounts thereunder settled, and then the excess of theDefaulted Lease claim proceeds would be associated electronically orotherwise with the file for the TA Note. An example intercreditoragreement is shown in the Appendix.

Internet Broadcasting

The present invention also includes providing a computer implementedmethod for providing loan services in accordance with the presentinvention over the Internet, including Internet broadcasting or videostreaming to deliver information and services requested by clients. Thisconcept includes providing an electronic calculator by downloading webcontent from a web site for calculating the various loan amounts, rates,and other terms disclosed herein.

Internet broadcasting is a generic term that covers both live one-way ortwo-way video and access to other on demand material, whether video ornot, that a user can request. Therefore, the present invention includesusing Internet broadcasting to explain, market, sell, and assist peopleto obtain loan services products from banks, brokerage firms, mutualfunds, insurance companies, etc. Thus the client's questions orinformation requests could be answered by a video of a person or a liveperson.

SMIL

“SMIL” is a technology whose abbreviation stands for SynchronizedMultimedia Integrated Language, which is free software that can bedownloaded and allows both Internet broadcasting and data display of aform at the same time on a computer screen. In other words the clientcan see the person who is helping fill out the form at the same time asfilling out the form.

The broadcasting site or Internet server can stream video, still photos,data, charts, images, and text at the same time for side-by-sidedisplay. This may be used for loan service products, banks, mutualfunds, stock brokerage firms, etc.

Links

The present invention also includes providing clients with loan servicesthrough an internet website including providing hot links whichautomatically take the client to another web page of the provider or ofa third-party for information or calculations requested by a client.

These technologies include media-on-demand which works by having abutton or other indicator on the web site, which when clicked, links (orhot links) to another server, which maintains a mirror of the web siteweb page, and provides a stream or broadcast of the requested content.The reason this technology is preferable relative to importing just thestream or feed into the provider's web site is that when changes aremade by the provider of the media-on-demand, the changes can beautomatically adjusted at the media-on-demand web site and there is noneed to keep adjusting the provider's web site every time there is achange at the media on demand server.

Therefore, the present invention includes the use of hot links in loanservice products to explain, assist, sell, market or cause Internetbroadcasting to be used to sell a loan services product. Whether thelink is to a mirrored site on another server or simply imports data,pictures or other information from another site, these are all includedin the present invention.

Accordingly, the present invention contemplates the use of hot links tocover banks, brokerage firms, mutual funds, all other types of financialinstitutions, insurance companies, their agents, and certainly anyonewho markets a loan product including an Internet portal (e.g., AOL).

As an alternative or in addition, the web site could be used as a toolto allow a buyer of notes to interactively assemble TA and CL Note poolsfor securitization and purchase.

Structure

The inherent value of the Multi-Note Loan structure implemented inaccordance with the present invention is that it is able to satisfy oneor more of the following constituents while at the same time meetingtheir exacting standards:

Borrowers—the Multi-Note Loan structure generates similar loan proceedsto those generated by a 20 year fully amortizing CTL loan, which makesit a viable loan product.

Rating Agencies—in senior/subordinate A/B loan structures, the B Notestake many different forms. For instance, the B notes may take the formof mezzanine debt, preferred equity or hard and/or soft second mortgagenotes. The rating agencies evaluate this form of additionalindebtedness, as increasing the risk profile of the loan while alsoadding an additional layer of complexity. Consequently, the ratingagencies, when rating a loan (or pool of loans), typically ascribe ahigher subordination level to loans using a traditionalsenior/subordinate loan structure to compensate for the additionalindebtedness. This means that a greater percentage of the loan (or poolof loans) will be rated below “AAA” as a result of the additionalindebtedness.

The Multi-Note Loan structure of the present invention is unique becauseit generates substantially fully leveraged loan proceeds (i.e. loanproceeds similar to a traditional CTL loan at debt service coverageratios ranging from approximately 1.0 to approximately 1.05 times) whileat the same time achieving more favorable treatment from the RatingAgencies than traditional CTL loans and other senior/subordinate loanstructures. Because the intercreditor agreement between the holders ofthe CL Note and the TA Note clearly delineates the sources and priorityof tangible asset recovery in the event of a default, and maintains thecredit quality of the cash flows from the underlying credit tenant'slease, the Rating Agencies can treat the Multi-Note Loan structure morefavorably than traditional senior/subordinate loan structures and applythe following treatment to the Multi-Note Loan structure:

At worst, ascribe a normal subordination level consistent with thoseloans that are similar to the TA Note and, at best, ascribe a “shadow”or “rating estimate” equal to (or slightly lower than) the credit ratingof the underlying lessee for the TA Note; and

Ascribe a “shadow” or “rating estimate” equal to the credit rating ofthe underlying lessee for the CL Note.

Tangible Asset/Conduit Lenders—as the majority of the economics of theloan reside with the TA Note, which will be contributed to or placedinto generic public (or private) capital market securitizationtransactions, such as generic real estate CMBS securitizations in thepresent example, the Multi-Note Loan structure should conform to thestandards of the tangible asset/Conduit lenders. The Multi-Note Loanstructure satisfies these investors because it meets or exceeds theirrequirements in terms of:

-   -   LTV ratio;    -   DSCR ratio;    -   Asset type;    -   Loan underwriting, structure and terms; and

It also meets or exceeds their requirements for tangible asset recoveryin terms of disposition authority and priority. In the event of adefault, the source of recovery for the tangible asset lender is thetangible asset.

CBO investors—as these types of investors are purely fixed income andcredit/bond oriented and not tangible asset knowledgeable, the CL Noteproduct should “look and feel” like a bond of a credit tenant. TheMulti-Note Loan structure satisfies these investors as it provides forregular uninterrupted scheduled payments from the credit tenant anddelineates tangible asset recovery and priority of claims in theintercreditor agreement. The CL Note holder has first priority in theunsecured claim in bankruptcy under Section 502(b)(6) of the BankruptcyCode for the remaining rent due under the lease and any other claims forrent due under a defaulted loan. The priority of this claim is exactlyor substantially the same as priority of the claim of senior unsecuredbondholders.

“B” piece buyers—the “B” piece buyers are the holders of the most juniorcertificates in the tangible asset/conduit securitization. As such, theyare in the first loss position of the securitization and the holders ofthe riskiest class of bonds. The universe of “B” piece buyers is verylimited, amounting to only a few investors. They are influential withthe tangible asset/conduit lenders as to the composition of the tangibleasset/conduit securitizations and have the power to have certain loansremoved from a tangible asset/conduit loan securitization. The TA Notegenerated by the inventive Multi-Note Loan structure described hereinsubstantially meets tangible asset/conduit securitization standards asmore particularly described above and are thus acceptable to the various“B” piece buyers.

Inter-Creditor Agreement

The inter-creditor agreement, as described previously, is a documentwhich governs the rights between the TA Note and CL Note holders. Theinter-creditor agreement, in a preferred embodiment, accomplishes thefollowing:

-   -   assigns most of the rights and responsibilities with respect to        the tangible asset, lease modifications, loan workouts, property        protection advances, and other tangible asset/real estate        collateral related matters to the TA Note holder;    -   addresses the allocation of recoveries amongst the two note        holders;    -   provides first priority recovery under the tangible asset to the        TA Note holder; and    -   provides first priority recovery under Section 502 (b)(6) of the        US Bankruptcy Code and any other Defaulted Lease claims to the        CL Note holder.    -   provides first priority of lease payments to the TA Note

The structure of the present invention, in the example shown, providesproceeds to a borrower that are similar to those generated by a fullyamortizing 20 year CTL loan, while at the same time meeting therequirements and standards of the various parties involved in thedisposition of both notes in the capital markets.

Benefits

The benefits of the Multi-Note Loan structure for lenders include one ormore of the following:

-   1. Enables the sale of securities into two deep and liquid markets    (i.e. placed into generic public (or private) capital market    securitization transactions, such as generic real estate CMBS    securitizations and generic CBO securitizations; and-   2. Improves the certainty of the sale of the resulting notes    generated in accordance with the present method and system.

The benefits of this new structure for borrowers may include one or moreof the following:

-   1. Creates liquidity for properties leased to certain types of    lessees for which full leverage financing is generally not available    due to an oversupply in the marketplace. These credits would include    most drug store credits such as CVS Corporation and Walgreen Co.    Currently, most life insurance companies and pension plans have    completely depleted their allocations for such credits, and there is    little or no additional mortgage financing available for these    credits in the marketplace.-   2. Enables borrowers to receive substantially fully leveraged loans    on properties net leased to marginal investment grade tenants and    some below investment grade tenants which no other lending source is    willing to provide. This would include credits ranging from BB+ to    BBB+.-   3. Gives borrowers a higher level of proceeds for shorter term    leases. This program will enable borrowers to obtain substantially    fully leveraged proceeds for other lease terms, such as 15 year    lease terms, which are approximately equivalent to the proceeds    under a 20 year lease. Most borrowers with properties leased to    tenants for 15 year lease terms would be restricted to conduit type    real estate financing limited to no more than a 75% LTV ratio, which    would be well below the level of proceeds generated by the    Multi-Note Loan structure of the present invention.-   4. Provides better loan pricing to borrowers.

To summarize one important aspect of the present invention, in a typicalsenior/subordinate (A/B) loan structure, (e.g. mezzanine debt, preferredequity or hard and/or soft second mortgage notes) the additionalindebtedness, in addition to adding a layer of complexity, alsoincreases the risk profile of the loan. Rating agencies, when rating aloan (or pool of loans), typically ascribe a higher subordination levelto loans using a traditional senior/subordinate loan structure tocompensate for the added risk associated with the additionalindebtedness. This means that a greater percentage of the loan (or poolof loans) will be rated below “AAA” as a result of the additionalindebtedness.

The Multi-Note Loan structure of the present invention is unique becauseit generates substantially fully leveraged loan proceeds (i.e. loanproceeds similar to a traditional CTL loan at debt service coverageratios, in a preferred embodiment, ranging from approximately 1.0 toapproximately 1.05 times) while at the same time not negativelyimpacting the risk profile of the overall loan or of the TA Note or theCL Note.

The intercreditor agreement between the holders of the CL Note and theTA Note clearly delineates the sources and priority of tangible assetrecovery and Defaulted Lease claims between the note holders in theevent of a loan default, and maintains the credit quality of the cashflows from the underlying credit tenant's lease. The rating agenciestherefore can treat the Multi-Note Loan structure of the presentinvention more favorably than the traditional senior/subordinate loanstructures and allow the two notes to be viewed, analyzed and sold asindependent instruments not dependent on one another.

Consequently, the Ratings Agencies will ascribe, at worst, a normalsubordination level consistent with those loans that are similar to theTA Note and, at best, ascribe a “shadow” or “rating estimate” equal to(or slightly lower than) the credit rating of the underlying lessee tothe TA Note. In addition, the rating agencies will also ascribe a“shadow” or “rating estimate” equal to the credit rating of theunderlying lessee to the CL Note.

It should be noted that although the flow charts provided herein show aspecific order of method steps, it is understood that the order of thesesteps may differ from what is depicted. Also, two or more steps may beperformed concurrently or with partial concurrence. Such variation willdepend on the software and hardware systems chosen and on designerchoice. It is understood that all such variations are within the scopeof the invention. Likewise, software and web implementations of thepresent invention could be accomplished with standard programmingtechniques with rule based logic and other logic to accomplish thevarious database searching steps, correlation steps, comparison stepsand decision steps that may be required. Note that the example loanterm, loan amounts and other parameters discussed herein are providedonly for ease of explanation, and the scope of the invention is not solimited.

It should also be noted that the word “component” and the word “step” asused herein and in the claims are intended to encompass implementationsusing one or more lines of software code, and/or hardwareimplementations, and/or equipment for receiving manual inputs.Additionally, the phrase “computer-implemented method” means that one ormore of the method steps are implemented on a computer or otherautomatic processing device. Additionally, the words “one or more files”means that the data could be provided in one file, two or more separatefiles, or subparts of a single file or multiple files. Additionally, theword “associating” means adding the item or value or a reference theretointo a file or between the files or other elements and encompasseselectronic association. The words “electronically associating” meanadding the item or value or an electronic reference between electronicfiles or other elements. The words “electronic reference” mean a URLreference, or a pointer, socket number or other backroom retail, toanother internal or external location. The words “electronic files” isintended to be interpreted as a generic phrase covering all forms ofdata storage, including electronic, magnetic, optical, and any otherconvenient forms of storage.

The foregoing description of preferred embodiments of the invention hasbeen presented for purposes of illustration and description. It is notintended to be exhaustive nor to limit the invention to the precise formdisclosed, and modifications and variations are possible in light of theabove teachings or may be acquired from practice of the invention. Theembodiments were chosen and described in order to explain the principalsof the invention and its practical application to enable one skilled inthe art to utilize the invention in various embodiments and with variousmodifications as are suited to the particular use contemplated. It isintended that the scope of the invention be defined by the claimsappended hereto, and their equivalent.

1. A method comprising the steps: determining a revenue stream from alease of a leased tangible asset; calculating a Breakeven TA (tangibleasset) Note Rate, and a TA Not Amount for a TA Note based on aMulti-Note Loan Coupon, a TA Note Debt Service and a market determinedunderwriting parameters for the tangible asset; calculating a CL (creditlease) Note Debt Service after at least the TA Note debt service issubtracted from the revenue stream; calculating in an electroniccomputing device a Breakeven CL Note Rate and a CL Note Amount for a CLNote based on the calculated CL Note Debt Service, the Multi-Note LoanCoupon, a CL Note Debt Service, and market determined underwritingparameters; creating a file structure of one or more files for the TANote and the CL Note; and associating the TA Note and CL Note to assignpriorities for purposes of determining and distributing recoveries toholders of the TA Note and/or the CL Note and/or their designees in theevent of a Multi-Note Loan default and allocating the rights andresponsibilities of the holders of such notes.
 2. The method as definedin claim 1, wherein the Multi-Note Loan Coupon is initially an estimatedvalue, wherein the Breakeven TA Note Rate and the CL Note Debt Serviceand the Breakeven CL Note Rate are calculated or determined using theestimated Multi-Note Loan Coupon, and further comprising calculating theMulti-Note Loan Coupon based on the Breakeven TA Note Rate and theBreakeven CL Note Rate.
 3. The method as defined in claim 2, furthercomprising the step of recalculating the Breakeven TA Note Rate, theBreakeven CL Note Rate and the Multi-Note Loan Coupon based on theoriginal calculated Multi-Note Loan Coupon.
 4. The method as defined inclaim 3, further comprising the step of performing the recalculatingstep for the Breakeven TA Note Rate, the Breakeven CL Note Rate and theMulti-Note Loan Coupon multiple times until a criteria is met.
 5. Themethod as defined in claim 4, wherein the criteria is that a margin fromthe Multi-Note Loan Coupon equals or exceeds a predetermined amount. 6.The method as defined in claim 1, wherein the CL Note Rate is determinedin part from a corporate credit rate spread applicable to the lessee orits industry.
 7. The method as defined in claim 1, further comprisingthe step of calculating a Breakeven Multi-Note Loan Rate using theBreakeven TA Note Rate and the Breakeven CL Note Rate as elements in analgorithm.
 8. The method as defined in claim 1, wherein the associatingstep comprises assigning priority of distribution of tangible assetrecovery proceeds first to the TA Note, and any excess to the CL Noteand assigning priority of the distribution of the proceeds of aDefaulted Lease Claim first to the CL Note and any excess to the TANote.
 9. The method as defined in claim 8, wherein the determining anddistributing step comprises on the occurrence of a sale of the tangibleasset after a default under the Multi-Note Loan, calculating an excessof sale proceeds over amounts due for a payoff of the TA Note and, onreceipt of the proceeds from the Defaulted Lease Claim, calculating anexcess of proceeds from the Defaulted Lease Claim over amounts due for apayoff of the CL Note; and electronically associating the excess of saleproceeds over the amounts due under the TA Note with the file for the CLNote and/or electronically associating the excess of proceeds from theDefaulted Lease Claim over amounts due under the CL Note with the filefor the TA Note.
 10. The method as defined in claim 9, furthercomprising the step of transferring the calculated excess amount fromthe sale proceeds of the tangible assets to a holder of the CL Note orits designee.
 11. The method as defined in claim 9, further comprisingthe step of transferring the calculated excess amount from the DefaultedLease Claim to a holder of the TA Note or its designee.
 12. The methodas defined in claim 1, further comprising the step of electronicallyassociating the one or more files for the TA Note and the CL Note, whichcomprise electronic files.
 13. The method as defined in claim 1, furthercomprising the step of transferring the TA Note and CL Note to differentparties.
 14. The method as defined in claim 1, further comprising thestep of subtracting from the lease revenues loan reserve amounts tosupport lessor maintenance and other obligations to mitigate risk ofpotential termination of or interruption in the lease payments due tothe failure of the lessor or others to perform their obligations. 15.The method as defined in claim 14, further comprising the step ofsubtracting from the Multi-Note Loan proceeds amounts to pay premiumsfor specialized insurance policies to mitigate the risk of potentialtermination of or interruption in the lease payments due to variouspotential contingencies.
 16. The method as defined in claim 1, whereinthe step of obtaining a Breakeven TA Note Rate comprises obtaining abenchmark rate and a Breakeven TA Note Spread.
 17. The method as definedin claim 1, wherein the step of obtaining the Breakeven CL Note Ratecomprises determining a discount rate based on an algorithm that uses abenchmark rate and a lessee corporate bond spread as elements.
 18. Themethod as defined in claim 1, wherein the step of obtaining theBreakeven CL Note Rate comprises determining a discount rate based on analgorithm that uses a benchmark rate and a generic corporate bond spreadbased on a debt rating.
 19. A method comprising the steps: determining arevenue stream from a lease of a leased tangible asset; calculating ordetermining at least in part via an electronic computing deviceparameters of a TA (tangible asset) Note and a CL (credit lease) Notebased in part on the revenue stream; creating a file structure of one ormore files for the TA Note and the CL Note; and associating the TA Noteand CL Note to assign priorities for purposes of application of therevenue stream and/or for purposes of determining and distributingrecoveries to holders of the TA Note and/or the CL Note and/or theirdesignees in the event of a Multi-Note Loan default.
 20. The method asdefined in claim 19, wherein the associating step further comprisesallocating rights and responsibilities of the holders of such notes andassociating those rights and responsibilities with the TA Note and CLNote file structure.
 21. The method as defined in claim 19, comprisingthe step of calculating an CL Note Debt Service after a TA Note debtservice is subtracted from the revenue stream; and wherein at least oneparameter for the CL Note is determined based on the CL Note DebtService.
 22. The method as defined in claim 19, wherein the calculatingand determining parameters of a TA Note and a CL Note step is also basedin part on a Multi-Note Loan Coupon.
 23. The method as defined in claim22, wherein the Multi-Note Loan Coupon is initially an estimated value,and wherein the TA Note parameters and CL Note parameters are calculatedor determined using the estimated Multi-Note Loan Coupon; and furthercomprising re-calculating the Multi-Note Loan Coupon based on theresulting TA Note parameters and the CL Note parameters.
 24. The methodas defined in claim 23, further comprising the step of recalculating atleast one parameter for the TA Note and the CL Note and recalculatingthe Multi-Note Loan Coupon based on the calculated Multi-Note LoanCoupon.
 25. The method as defined in claim 24, further comprising thestep of performing the recalculating step for the at least one parameterfor the TA Note and the CL Note and the Multi-Note Loan Coupon multipletimes until a criteria is met.
 26. The method as defined in claim 25,wherein the criteria is that a margin from the Multi-Note Loan Couponequals or exceeds a predetermined amount.
 27. The method as defined inclaim 19, wherein one of the parameters for the CL Note is a CL NoteRate which is determined in part from a corporate credit rate spreadapplicable to the lessee or its industry.
 28. The method as defined inclaim 19, wherein the associating step comprises assigning priority ofdistribution of tangible asset recovery proceeds first to the TA Note,and any excess to the CL Note and assigning priority of the distributionof the proceeds of a Defaulted Lease Claim first to the CL Note and anyexcess to the TA Note.
 29. The method as defined in claim 28, whereinthe determining and distributing step comprises on the occurrence of asale of the tangible asset after a default under the Multi-Note Loan,calculating an excess of sale proceeds over amounts due for a payoff ofthe TA Note and, on receipt of the proceeds from the Defaulted LeaseClaim, calculating an excess of proceeds from the Defaulted Lease Claimover amounts due for a payoff of the CL Note; and electronicallyassociating the excess of sale proceeds over the amounts due under theTA Note with the file for the CL Note and electronically associating theexcess of proceeds from the defaulted lease claim over amounts due underthe CL Note with the file for the TA Note.
 30. The method as defined inclaim 29, further comprising the step of transferring the calculatedexcess amount from the sale proceeds of the tangible assets to a holderof the CL Note or its designee.
 31. The method as defined in claim 29,further comprising the step of transferring the calculated excess amountfrom the Defaulted Lease Claim to a holder of the TA Note or itsdesignee.
 32. The method as defined in claim 1, further comprising thestep of electronically associating the one or more files for the TA Noteand the CL Note, wherein the one or more files are electronic files. 33.The method as defined in claim 1, further comprising the step oftransferring the TA Note and CL Note to different parties.
 34. Themethod as defined in claim 19, further comprising the step ofsubtracting from the revenues loan reserve amounts to support lessormaintenance and other obligations to mitigate risk of potentialtermination of or interruption in the lease payments due to the failureof the lessor or others to perform their obligations.
 35. The method asdefined in claim 34, further comprising the step of subtracting fromMulti-Note Loan proceeds amounts to pay premiums for specializedinsurance policies to mitigate the risk of potential termination of orinterruption in the lease payments due to various potential.
 36. Themethod as defined in claim 19, wherein the step of calculating anddetermining parameters for the TA Note comprises obtaining a benchmarkrate and a Breakeven TA Note Spread and then determining a Breakeven TANote Rate.
 37. The method as defined in claim 19, wherein the step ofcalculating and determining parameters for the CL Note comprisesdetermining a discount rate based on an algorithm that uses a benchmarkrate and a lessee corporate bond spread as elements and then determininga Breakeven CL Note Rate.
 38. The method as defined in claim 19, whereinthe step of calculating and determining parameters for the CL Notecomprises determining a discount rate based on an algorithm that uses abenchmark rate and a generic corporate bond spread based on a debtrating and then determining a Breakeven CL Note Rate.
 39. The method asdefined in claim 19, further comprising the step of aggregating aplurality of the TA Notes or the CL Notes to obtain a pool value. 40.The method as defined in claim 39, wherein the pool value is sentelectronically to a potential buyer.
 41. The method as defined in claim19, further comprising the steps of providing a web page with webcontent that performs the calculating and determining step.
 42. Themethod as defined in claim 41, further comprising the step ofcalculating a Multi-Note Loan Coupon using the web content; anddisplaying the Multi-Note Loan Coupon to a potential borrower.
 43. Themethod as defined in claim 41, wherein a web page that is provided withweb content displays TA Notes and CL Notes and that facilitates apotential buyer forming a customized pool of TA Notes or CL Notes. 44.The method as defined in claim 24, further comprising the steps ofproviding a web page with web content that performs the calculating anddetermining step, the calculating of the Multi-Note Loan Coupon, and therecalculating of at least one parameter for the TA Note and the CL Noteand recalculating the Multi-Note Loan Coupon step.
 45. Acomputer-implemented method of creating a loan from a revenue streamfrom a lessee, comprising the following steps: determining rents from alease of an asset; obtaining an indication of a value of the asset;obtaining a TA (tangible asset) Note to tangible asset value ratio;obtaining an estimated Multi-Note Loan Coupon; calculating a BreakevenTA Note Rate; calculating a Breakeven TA Note Value for a TA Note usingan algorithm that includes as factors the indication of value of thetangible asset, the Breakeven TA Note Rate, and the TA Note to tangibleasset value ratio and appropriate debt service coverage ratio for theasset; calculating a CL (credit lease) Note Debt Service; obtaining aBreakeven CL Note Rate based in part on the market determined corporatebond spread for the lessee or its industry; calculating a Breakeven CLNote Value based on predetermined elements including the CL Note DebtService, the Breakeven CL Note Rate and a term for the CL Note;calculating via an electronic computing device a Breakeven Multi-NoteLoan Rate using the Breakeven TA Note Rate, the Breakeven CL Note Rate,TA Note Debt Service and the CL Note Debt Service as elements in thecalculation; and calculating a Multi-Note Loan Coupon by adding a lenderprofit margin to the Breakeven Multi-Note Loan Rate.
 46. The method asdefined in claim 45, wherein the Multi-Note Loan Coupon is initially anestimated value, wherein the Breakeven TA Note Rate and the CL Note DebtService and the Breakeven CL Note Rate are calculated or determinedusing the estimated Multi-Note Loan Coupon, and further comprisingcalculating the Multi-Note Loan Coupon based on the Breakeven TA NoteRate and the Breakeven CL Note Rate.
 47. The method as defined in claim45, further comprising the step of recalculating the Breakeven TA NoteRate, the Breakeven CL Note Rate and the Multi-Note Loan Coupon based onthe calculated Multi-Note Loan Coupon.
 48. The method as defined inclaim 47, further comprising the step of performing the recalculatingstep for the Breakeven TA Note Rate, the Breakeven CL Note Rate and theMulti-Note Loan Coupon multiple times until a criteria is met.
 49. Themethod as defined in claim 48, wherein the criteria is that a marginfrom the Multi-Note Loan Coupon equals or exceeds a predeterminedamount.
 50. The method as defined in claim 45, wherein the tangibleasset is real estate.
 51. The method as defined in claim 45, wherein theTA Note to tangible asset value ratio is determined based on a type oftangible asset, quality of the tangible asset, length of the lease, andquality of lessee.
 52. The method as defined in claim 45, wherein therent is from a lease by a single tenant.
 53. The method as defined inclaim 45, further comprising the step of aggregating a plurality of theTA Notes or the CL Notes to obtain a pool value.
 54. The method asdefined in claim 53, wherein the pool value is sent electronically to apotential buyer.
 55. A computer-implemented system of creating a loanfrom a revenue stream from a lessee, comprising: an electronic storage;and a processor that uses the electronic storage and is programmed toperform the following method steps: determining a revenue stream from alease of a leased tangible asset; calculating a Breakeven TA (tangibleasset) Note Rate, and a TA Note Amount for a TA Note based on aMulti-Note Loan Coupon, a TA Note Debt Service and a market determinedunderwriting parameters for the tangible asset; calculating a CL (creditlease) Note Debt Service after at least the TA Note debt service issubtracted from the revenue stream; calculating in an electroniccomputing device a Breakeven CL Note Rate and a CL Note Amount for a CLNote based on the calculated CL Note Debt Service, the Multi-Note LoanCoupon, a CL Note Debt Service, and market determined underwritingparameters; creating a file structure of one or more files for the TANote and the CL Note; and associating the TA Note and CL Note to assignpriorities for purposes of determining and distributing recoveries toholders of the TA Note and/or the CL Note and/or their designees in theevent of a Multi-Note Loan default and allocating the rights andresponsibilities of the holders of such notes.
 56. A program product forcreating a loan from a revenue stream from a lessee, comprising: acomputer usable medium having computer readable program code embodiedtherein that is to be executed by a computer, the computer readableprogram code comprising: computer readable program code for determininga revenue stream from a lease of a leased tangible asset; computerreadable program code for calculating a Breakeven TA (tangible asset)Note Rate, and a TA Note Amount for a TA Note based on a Multi-Note LoanCoupon, a TA Note Debt Service and a market determined underwritingparameters for the tangible asset; computer readable program code forcalculating a CL (credit lease) Note Debt Service after at least the TANote debt service is subtracted from the revenue stream; computerreadable program code for calculating a Breakeven CL Note Rate and a CLNote Amount for a CL Note based on the calculated CL Note Debt Service,the Multi-Note Loan Coupon, a CL Note Debt Service, and marketdetermined underwriting parameters; computer readable program code forcreating a file structure of one or more files for the TA Note and theCL Note; and computer readable program code for associating the TA Noteand CL Note to assign priorities for purposes of determining anddistributing recoveries to holders of the TA Note and/or the CL Noteand/or their designees in the event of a Multi-Note Loan default andallocating the rights and responsibilities of the holders of such notes.57. The program product as defined in claim 56, wherein the Multi-NoteLoan Coupon is initially an estimated value, wherein the Breakeven TANote Rate and the CL Note Debt Service and the Breakeven CL Note Rateare calculated or determined using the estimated Multi-Note Loan Coupon,and further comprising code for calculating the Multi-Note Loan Couponbased on the Breakeven TA Note Rate and the Breakeven CL Note Rate. 58.The program product as defined in claim 57, further comprising code fora step of recalculating the Breakeven TA Note Rate, the Breakeven CLNote Rate and the Multi-Note Loan Coupon based on the originalcalculated Multi-Note Loan Coupon.
 59. The program product defined inclaim 58, further comprising code for a step of performing therecalculating step for the Breakeven TA Note Rate, the Breakeven CL NoteRate and the Multi-Note Loan Coupon multiple times until a criteria ismet.
 60. The program product as defined in claim 59, wherein thecriteria is that a margin from the Multi-Note Loan Coupon equals orexceeds a predetermined amount.
 61. The program product as defined inclaim 56, wherein the CL Note Rate is determined in part from acorporate credit rate spread applicable to the lessee or its industry.62. The program product as defined in claim 56, further comprising codefor a step of calculating a Breakeven Multi-Note Loan Rate using theBreakeven TA Note Rate and the Breakeven CL Note Rate as elements in analgorithm.
 63. The program product as defined in claim 56, wherein theassociating step comprises assigning priority of distribution oftangible asset recovery proceeds first to the TA Note, and any excess tothe CL Note and assigning priority of the distribution of the proceedsof a Defaulted Lease Claim first to the CL Note and any excess to the TANote.
 64. The program product as defined in claim 63, wherein thedetermining and distributing step comprises on the occurrence of a saleof the tangible asset after a default under the Multi-Note Loan,calculating an excess of sale proceeds over amounts due for a payoff ofthe TA Note and, on receipt of the proceeds from the Defaulted LeaseClaim, calculating an excess of proceeds from the Defaulted Lease Claimover amounts due for a payoff of the CL Note; and electronicallyassociating the excess of sale proceeds over the amounts due under theTA Note with the file for the CL Note and/or electronically associatingthe excess of proceeds from the Defaulted Lease Claim over amounts dueunder the CL Note with the file for the TA Note.
 65. The program productas defined in claim 64, further comprising code for a step oftransferring the calculated excess amount from the sale proceeds of thetangible assets to a holder of the CL Note or its designee.
 66. Theprogram product as defined in claim 64, further comprising the step oftransferring the calculated excess amount from the Defaulted Lease Claimto a holder of the TA Note or its designee.
 67. The program product asdefined in claim 56, further comprising code for a step ofelectronically associating the one or more files for the TA Note and theCL Note.
 68. The program product as defined in claim 56, furthercomprising code for a step of transferring the TA Note and CL Note todifferent parties.
 69. The program product as defined in claim 56,further comprising code for a step of subtracting from the leaserevenues loan reserve amounts to support lessor maintenance and otherobligations to mitigate risk of potential termination of or interruptionin the lease payments due to the failure of the lessor or others toperform their obligations.
 70. The program product as defined in claim69, further comprising code for a step of subtracting from theMulti-Note Loan proceeds amounts to pay premiums for specializedinsurance policies to mitigate the risk of potential termination of orinterruption in the lease payments due to various potentialcontingencies.
 71. The program product as defined in claim 56, whereinthe step of obtaining a Breakeven TA Note Rate comprises obtaining abenchmark rate and a Breakeven TA Note Spread.
 72. The program productas defined in claim 56, wherein the step of obtaining the Breakeven CLNote Rate comprises determining a discount rate based on an algorithmthat uses a benchmark rate and a lessee corporate bond spread aselements.
 73. The program product as defined in claim 56, wherein thestep of obtaining the Breakeven CL Note Rate comprises determining adiscount rate based on an algorithm that uses a benchmark rate and ageneric corporate bond spread based on a debt rating.
 74. A programproduct for creating a loan from a revenue stream from a lessee,comprising: a computer usable medium having computer readable programcode embodied therein, the computer readable program code comprising:computer readable program code for determining a revenue stream from alease of a leased tangible asset; computer readable program code forcalculating or determining at least in part via an electronic computingdevice parameters of a TA (tangible asset) Note and a CL (credit lease)Note based in part on the revenue stream; computer readable program codefor creating a file structure of one or more files for the TA Note andthe CL Note; and computer readable program code for associating the TANote and CL Note to assign priorities for purposes of application of therevenue stream and/or for purposes of determining and distributingrecoveries to holders of the TA Note and/or the CL Note and/or theirdesignees in the event of a Multi-Note Loan default.
 75. The programproduct as defined in claim 74, wherein the associating step furthercomprises allocating rights and responsibilities of the holders of suchnotes and associating those rights and responsibilities with the TA Noteand CL Note file structure.
 76. The program product as defined in claim74, comprising code for a step of calculating an CL Note Debt Serviceafter a TA Note debt service is subtracted from the revenue stream; andwherein at least one parameter for the CL Note is determined based onthe CL Note Debt Service.
 77. The program product as defined in claim74, wherein the calculating and determining parameters of a TA Note anda CL Note step is also based in part on a Multi-Note Loan Coupon. 78.The program product as defined in claim 77, wherein the Multi-Note LoanCoupon is initially an estimated value, and wherein the TA Noteparameters and CL Note parameters are calculated or determined using theestimated Multi-Note Loan Coupon; and further comprising code forre-calculating the Multi-Note Loan Coupon based on the resulting TA Noteparameters and the CL Note parameters.
 79. The program product asdefined in claim 78, further comprising code for a step of recalculatingat least one parameter for the TA Note and the CL Note and recalculatingthe Multi-Note Loan Coupon based on the calculated Multi-Note LoanCoupon.
 80. The program product as defined in claim 79, furthercomprising the step of performing the recalculating step for the atleast one parameter for the TA Note and the CL Note and the Multi-NoteLoan Coupon multiple times until a criteria is met.
 81. The programproduct as defined in claim 80, wherein the criteria is that a marginfrom the Multi-Note Loan Coupon equals or exceeds and predeterminedamount.
 82. The program product as defined in claim 74, wherein one ofthe parameters for the CL Note is a CL Note Rate which is determined inpart from a corporate credit rate spread applicable to the lessee or itsindustry.
 83. The program product as defined in claim 74, wherein theassociating step comprises assigning priority of distribution oftangible asset recovery proceeds first to the TA Note, and any excess tothe CL Note and/or assigning priority of the distribution of theproceeds of a Defaulted Lease Claim first to the CL Note and any excessto the TA Note.
 84. The program product as defined in claim 83, whereinthe determining and distributing step comprises on the occurrence of asale of the tangible asset after a default under the Multi-Note Loan,calculating an excess of sale proceeds over amounts due for a payoff ofthe TA Note and, on receipt of the proceeds from the Defaulted LeaseClaim, calculating an excess of proceeds from the Defaulted Lease Claimover amounts due for a payoff of the CL Note; and electronicallyassociating the excess of sale proceeds over the amounts due under theTA Note with the file for the CL Note and electronically associating theexcess of proceeds from the defaulted lease claim over amounts due underthe CL Note with the file for the TA Note.
 85. The program product asdefined in claim 84, further comprising code for a step of transferringthe calculated excess amount from the sale proceeds of the tangibleassets to a holder of the CL Note or its designee.
 86. The programproduct as defined in claim 84, further comprising code for a step oftransferring the calculated excess amount from the Defaulted Lease Claimto a holder of the TA Note or its designee.
 87. The program product asdefined in claim 74, further comprising code for a step ofelectronically associating the one or more files for the TA Note and theCL Note.
 88. The program product as defined in claim 74, furthercomprising code for a step of transferring the TA Note and CL Note todifferent parties.
 89. The program product as defined in claim 74,further comprising code for a step of subtracting from the revenues loanreserve amounts to support lessor maintenance and other obligations tomitigate risk of potential termination of or interruption in the leasepayments due to the failure of the lessor or others to perform theirobligations.
 90. The program product as defined in claim 89, furthercomprising code for a step of subtracting from Multi-Note Loan proceedsamounts to pay premiums for specialized insurance policies to mitigatethe risk of potential termination of or interruption in the leasepayments due to various potential.
 91. The program product as defined inclaim 74, wherein the step of calculating and determining parameters forthe TA Note comprises obtaining a benchmark rate and a Breakeven TA NoteSpread and then determining a Breakeven TA Note Rate.
 92. The programproduct as defined in claim 74, wherein the step of calculating anddetermining parameters for the CL Note comprises determining a discountrate based on an algorithm that uses a benchmark rate and a lesseecorporate bond spread as elements and then determining a Breakeven CLNote Rate.
 93. The program product as defined in claim 74, wherein thestep of calculating and determining parameters for the CL Note comprisesdetermining a discount rate based on an algorithm that uses a benchmarkrate and a generic corporate bond spread based on a debt rating and thendetermining a Breakeven CL Note Rate.
 94. The program product as definedin claim 74, further comprising code for a step of aggregating aplurality of the TA Notes or the CL Notes to obtain a pool value. 95.The program product as defined in claim 94, further comprising code forsending the pool value electronically to a potential buyer.
 96. Theprogram product as defined in claim 74, further comprising code forsteps of providing a web page with web content that performs thecalculating and determining step.
 97. The program product as defined inclaim 96, further comprising code for a step of calculating a Multi-NoteLoan Coupon using the web content; and displaying the Multi-Note LoanCoupon to a potential borrower.
 98. The program product as defined inclaim 96, further comprising web content code for displaying on a webpage displays TA Notes and CL Notes and that facilitates a potentialbuyer forming a customized pool of TA Notes or CL Notes.
 99. The programproduct as defined in claim 78, further comprising code for steps ofproviding a web page with web content that performs the calculating anddetermining step, the calculating of the Multi-Note Loan Coupon, and therecalculating of at least one parameter for the TA Note and the CL Noteand recalculating the Multi-Note Loan Coupon step.
 100. A programproduct for creating a loan from a revenue stream from a lessee,comprising: a computer usable medium having computer readable programcode embodied therein that is to be executed by a computer, the computerreadable program code comprising: computer readable program code fordetermining rents from a lease of an asset; computer readable programcode for obtaining an indication of a value of the asset; computerreadable program code for obtaining a TA (tangible asset) Note totangible asset value ratio; computer readable program code for obtainingan estimated Multi-Not Loan Coupon; computer readable program code forcalculating a Breakeven TA Note Rate; computer readable program code forcalculating a Breakeven TA Note Value for a TA Note using an algorithmthat includes as factors the indication of value of the tangible asset,the Breakeven TA Note Rate, and the TA Note to tangible asset valueratio and apropriate debt service coverage ratio for the asset; computerreadable program code for calculating a CL (credit lease) Note DebtService; computer readable program code for obtaining a Breakeven CLNote Rate based in part on the market determined corporate bond spreadfor the lessee or its industry; computer readable program code forcalculating a Breakeven CL Not Value based on predetermined elementsincluding the CL Note Debt Service, the Breakeven CL Note Rate and aterm for the CL Note; computer readable program code for calculating aBreakeven Multi-Note Loan Rate using the Breakeven TA Note Rate, theBreakeven CL Note Rate, TA Note Debt Service and the CL Note DebtService as elements in the calculation; and computer readable programcode for calculating a Multi-Note Loan Coupon by adding a lender profitmargin to the Breakeven Multi-Note Loan Rate.
 101. The method as definedin claim 19, wherein the associating step comprises assigning priorityof distribution of tangible asset recovery proceeds first to the TANote, and assigning priority of the distribution of the proceeds of aDefaulted Lease Claim first to the CL Note.
 102. The program product asdefined in claim 74, wherein the associating step comprises assigningpriority of distribution of tangible asset recovery proceeds first tothe TA Note and/or assigning priority of the distribution of theproceeds of a Defaulted Lease Claim first to the CL Note.